tv The Kudlow Report CNBC September 20, 2013 7:00pm-8:01pm EDT
i like to say there's always a bull market somewhere and i promise to try to find it for you right here on "mad money." i'm jim cramer. see you next time. our message to the united states senate is simple, the american people don't want the american government shut down and they don't want obama care. >> speaker boehner sums it up right there. the house votes to keep funding the government but defund obama care. now the ball's in the senate's court. but it's all part of ping-pong politics and shutdowns, closer to the deadline, republicans taking a huge risk of the severe political backlash that would come from a shutdown. however, president obama says he's still not willing to negotiate with boehner or the other republicans on the debt ceiling. he'll negotiate with vladimir putin, he'll negotiate with the
president of iran but not the gop. and today he insisted the republicans are, quote, just messing with me. is all this bickering what sent the markets into a deep selloff? the dow finished 185 points lower even as investors expect janet yellen to take over the fed. those stories and much more coming up in "the kudlow report" beginning right now. it's 7:00 p.m. here at cnbc worldwide headquarters and we are live on "the kudlow report." the big story right now, the house voting today to keep the government running through mid december, locking a sequester savings and defund obama care. it was largely a party line vote. why are house republicans so committed to fighting the president's signature health care reform?
take a listen again to speaker boehner. >> listen, this is hurting our constituents. it's hurting the american people. at a time when the economy is barely eking along, wages aren't increasing, new jobs aren't available and what are we doing? we're putting more cost and more inconvenience on the american people. it's time for us to say, no. it's time to stop this before it causes any more damage to american families and american businesses. >> the bill now heads to the senate where it's expected to fail, moving both sides closer to a possible government shutdown at the end of the month. nbc's steve handelsman joins us with the details. >> good evening, larry. john boehner articulated what sounded like a strong argument and it looks like terrific republican unity in this house vote today. only one no gop vote in the house on this move to link, keeping government alive with
killing obama care. afterwards, republicans celebrated. >> my colleagues have all voted in favor of this law because it's going to help moms and dads and families and young people and seniors all across this country. >> and now it is up to senate democrats to show some responsibility and follow the house's lead. [ applause ] >> but, in fact, house republican leader eric cantor and speaker of the house, john boehner, did not want to link killing obama care with keeping government alive. they're fearful that the american public will blame them if there's a government shutdown and they're sure it's going to get killed in the senate. moderates, moderate republicans afterwards went after the texas tea party republican, senator ted cruz, who had the idea and is pushing this idea of linking
these two things together. >> something we have to do. it's a step in the right direction and hopefully a major step in letting people know that ted cruz is a fraud and he'll no longer have any influence in the republican party. >> and house democrats are savaging the republican party. >> this bill enshrines and confirms the descent into a national security undermining and ineffective rendering of the government that our country and our people need. >> at a ford plant in kansas city, president obama used republican division to his advantage. >> one republican senator called shutting down the government over the affordable care act the dumbest idea i've ever heard. i agree with him.
>> larry, a lot of sound bites from a lot of politicians. let's bring it back to real people. down at the washington navy yard where they endured that horrific shooting on monday, they're watching this fight up here on capitol hill very carefully because if government does shut down, larry, on october 1st, those navy yard workers won't get paid. back to you. >> i just want to ask you a question on that because my understanding as an old budget guy, essential functions will work and will get paid. nonessential functions will not get paid. in other words, it's a smaller pool than people think. >> that's right. and government doesn't really shut down. and the tsa still works, the faa. but our information at this point, larry, is that the u.s. military and civilian workers at the washington navy yard and all kinds of facilities like that will be required to work and they will get ious for checks that will be issued later after
government reopens or whatever you want to call it. >> that's exactly right. >> they're going to get ious. >> exactly right. thanks, nbc's steve handelsman. we have this breaking news just in to cnbc. speaker boehner's office says the president called the speaker this evening to tell him he would not negotiate with him on the debt limit. boehner's office says it's obviously disappointed by the decision. let's get right to our distinguished guests. they're two guys who strongly support the defunding strategy. house members phil rowe of tennessee, he's also a doctor, and brad winstrop from ohio. brad, i don't know if you're a doctor or not. >> yes, i am. >> good, two doctors. maybe you can give me some help. let me just ask you, this is an odd story. let me start with dr. rowe. president calls boehner and says, i'm not going to negotiate
with you. it's not like, hi, did you have a gad trip? do you want to play golf? no. he says, i'm not going to negotiate with you. what's up with that? >> that's ridiculous. presidents have negotiated with congress for years. there's a long history of that, certainly with the debt ceiling because the debt ceiling vote is one that we have to pass to run the full faith and credit of the government. so ultimately i think president obama will negotiate. let me just say, dr. winstrop over there is currently serving in the military. i'm an ex-military army veteran and served overseas. neither one of us got elected to shut the government down. we got elected to run the country. that's what i got elected to do and what the people in tennessee sent me to do. it's the president talking about a shutdown. today we just sent a bill to the senate to look at and evaluate, larry. >> i get that. but, brad, let me go to you. obama said also on the stump today that you all are just messing with me.
you're messing with me. and then he said, this will become a banana republic if we don't get the debt ceiling through and if obama care is defunding. so you're messing with me and a banana republic. what is your reaction to that? >> i think that my constituents feel like the president is messing with them. we see businesses shutting down, businesses letting people go, cutting people's hours back. we don't want to shut down the government, we don't want to shut down the country either. obama care is not only bad on the health care front, limiting access and making it more difficult and increasing costs but it's also bad for business. people are going to have a better opportunity to get good health care if they're actually working and working full time. and this bill takes that away. we're listening to the american people. in 2011 in ohio, 66% of ohioans voted for issue 3, which removed the individual mandate and made it illegal.
now, the supreme court trumped it. but i know what the people in ohio are saying to me abthis. and the president needs to listen to his constituents as we're listening to them. >> phil rowe, let me challenge as somebody who does not like obama care, i've opposed obama care from day one. but i want to challenge you. you probably saw the karl rove editorial in "the wall street journal." if you defund and shut down the government, people are going to be furious at the gop. i want to ask you what you think about that risk and secondly i want to ask you, wouldn't have been more popular politically, even among democrats, to have simply said, let's delay for one year the individual mandate, delay all parts of the individual mandate just like delaying the business mandate? why not have done that and broaden your base? why go this more controversial nature which has no way of
winning in the senate? >> a couple of things. you make some good points. but remember, this is just the first salvo. we're going to start a negotiation here. and i don't disagree that maybe the ultimate end of this is a delay of the individual mandate and of the entire bill. and let me give you some of the real-world effects. we have a major medical center in tennessee that's laying off 1,000 people. we've had a hospital close near me in southwest virginia. the cleveland clinic, one of the most famous health care clinics in the world, is laying off thousands of people. this is having an effect on real people and the republican study committee assigned me to write an alternative to the affordable care act which a committee we put together did this week. it puts patients and doctors in charge of health care, gets the bureaucra bureaucrats, insurance companies out of it. gets the people back in charge. it's market driven.
i think it's a much better plan than this incredibly complex 2,700-page bill. and just to finish up, it's a 182-page bill. >> that's a lot simpler than the current bill. but, brad, let me go back to you on this. >> sure. >> once again, i don't understand that -- it's not the broad strategy. it's the tactic. you're going to lose in the senate. and you risk a shutdown because this thing could drag on. are you telling me -- was dr. roe telling me that if it comes back from the senate, you or mr. boehner and the house will resubmit different iterations, like, for example, a one-year delay on the individual mandate? you know, that might make political sense to have fallback positions. you're going to get closer and closer to the september 30th shutdown deadline. is that what's going to happen here? >> well, i don't know what's going to happen exactly. we have to see what the senate does. it's now time for the senate to act on this. we need to know where they are.
for the last four or five years, we've hardly ever gotten to know where the senate is on just about anything. so this is an opportunity for them to let us know where they stand on this and let the american people know where they stand on this. >> with all due respect, we know -- harry reid has said with great clarity that this defunding is not going to work and he's going to get rid of it. and he's holding the cards. the president has said he's going to veto it. now he's making fun of ift. if you keep throwing things back -- i understand that. i think you should have started with the individual mandate. but you throw it back, you're playing ping-pong in effect from one house to the other. and meanwhile, the shutdown date gets closer and closer. i don't understand the politics of that. i think you're losing supporters on that. that's my concern. >> well, i think that we're clearly showing that we want to keep the government open and that is what we're doing. that's why we're going to be back there next week and not back in our district next week because that's the art of negotiation, right? it does have to go back and forth. and you mentioned in your
preview about the president, how he'll suddenly negotiate with putin and he'll negotiate with the syrians. you know, he's shown he will come to the table when he has to and start negotiating. and when the american people speak loud enough, which i think they are starting to do in this, they're starting to understand this law, i think the president may come and start talking to us. and he should. he owes that to the american people. >> he does. but he sounds like he made a very rude call to boehner. we'll learn more about this breaking news that just happened and it just came out of boehner's office. but i think that's extraordinary for the president to call the speaker of the house and say, i'm not going to negotiate. dr. roe, i'll give you the last word. i want to ask you something else that bothers me about this. with all the political risks you're taking on defunding obama care which holds up the bill, which gets you closer and closer to a shutdown, which gets the republican party more on the hook, you know -- i think you know the way the budget rules work, you can't defund under a
continuing resolution. the c.r. is about appropriations, dr. roe. most of obama care, 80% of obama care is an entitlement. and entitlements are not affected by the continuing resolution. so you're throwing yourself into the lion's den and the potential yield or rewards you're going to get is tiny. >> i disagree. they're not tiny. i think the fact that the affordable care act is one of the biggest mistakes this country's made legislatively in decades. you're already seeing the effects of it and it's time that we went to the mat on this. by the way, we did vote in the house to delay the individual mandate. it went nowhere in the senate. so we're not getting a hearing, as dr. winstrop said, in the senate. quite frankly, i think this is the strategy to take. we'll see what the senate brings back and we're going to be in town next week to continue this negotiation and not shut the government down. we've both been soldiers in the field. we want to pay our people out
there. that's our intent. >> i appreciate you coming on. i'm just challenging stuff. i'm an old reagan omb guy. i may not be a political genius. but i think the republican party is really taking a large risk on this one. gentlemen, thank you. congressman phil roe and brad winstrop. we appreciate it. steep selloff at the end of the day on wall street even though the markets are supposedly getting what they want from the fed. we'll talk about that and the queen of the doves, janet yellen, i say that respectfully. her impending nomination for fed chair may be as soon as this monday. but maybe the markets want ben bernanke to stick around. warren buffett certainly feels that way. >> i think bernanke -- i think if you have a .400 hitter in the lineup, you don't take him out. he may want to leave. but i think he's done -- since the panic of five years ago, i think he's done a terrific job.
and i think he ought to of a hand. >> i appreciate mr. buffett's point of view, as always. but i'm just here to say the nomination of janet yellen is a done deal. the senate banking committee staff has been nmpinformed by t white house. and my information is her nomination is coming this week and it might even be monday. we're going to talk stocks, fed and yellen, much more with our experts just ahead. please don't forget, free market capitalism is the best path to prosperity. i want a private sector-run health care plan. that's all i ask. i'm kudlow. we'll be right back. when we made our commitment to the gulf, bp had two big goals: help the gulf recover and learn from what happened
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i don't think they'll taper this year, no. if you go back and just look at their own numbers, they were projecting 3.2% growth for the second half of this year. we're going to be darn lucky to get to 2.2%. it's pretty hard to see how you're going to be tapering. >> that was former fed governor larry lindsey this morning on cnbc. is he right? will the fed keep its foot on
the gas pedal until 2014 or longer? let's ask our ace panel. peter costa, president of empire executions, dan greenhaus and dominic chu. if you get no tapering this year, easy money for the whole year, what's that do to the stock market? >> i think what we've seen today after one of the fed governors came out and said he felt that there might be some tapering done in october, the way i look at it -- as far as stocks are concerned, i think that the market has reacted very well from this. a lot of money's flooded into the system. a lot of banks are flush with cash now. i think it's time. i personally think it is time for a tapering. i think they should take the foot off the pedal and let the economy go where it's going to go. i think it's more about having corporations spend the cash
hoard that they have as opposed to having the government do it. it's time for corporate america to start spending some money. >> i think after the non-tapering statement on wednesday, i think the fed is more dovish than at least i thought. i just think they are. peter may be right in his analysis. but i think the fed is a more dovish -- and janet yellen coming in as chairman, i kiddingly say she's the queen of the doves but in fact she is. this whole story of tightening and tapering may be pushed well off into the future, more than a year. >> two things. the first is for what everybody thinks about ben bernanke being the dovish member of the federal reserve, janet yellen, from a growth inflation standpoint, has given some speeches that suggest that she's even more favorable towards low interest rates -- >> queen of the doves. >> but i reject the dove label because at the end of the day, her view from -- if you accept
that the federal reserve's point of view on the economy has been more right than has been the more hawkish camp, then she's been correct in her view that low interest rates have been necessary for a long period of time has been correct. and i think -- that said, with respect to the fed being more dovish than you thought, the overriding theme, the market and market participants continue to underestimate the degree to which ben bernanke is deadly serious about avoiding the types of things that he spent his life studying. >> so lindsey was right. he said they may not go for the rest of the year. lindsey is capturing the essence of what you just said, for example. >> at this point, the biggest problem -- i'll align myself with what al alarian says on this. >> market sold off a lot toward the end of the day.
>> sure. >> completely reversing the gains of wednesday, thursday with the fed's easier money policy. i guess i'll ask you why and is it a nervous trading market? >> it is a nervous trading market. the reason why we say that, as a market observer you watch what the action price has been like. we've not been in an uptrend since march of 2009. there have been pullbacks. each one has been bought. no reason to think another pullback would not be bought as well. the issue today was about fed president bullard of st. louis. he said it was a live meeting in october. that basically means that they could look to make some kind of a taper arrangement. the interesting part about what's going to happen now is whether the fed's transparency mandate is going to be as credible as it has been in the past. >> they did -- that's one of the problems. this is one of my favorite topics. in effect, their so-called forward guidance, they didn't follow through on it.
they could have done -- i don't want to get hung up on fed watching. but just saying this, they could have done a $5 billion taper or a $10 billion taper and it would have had no economic impact at all. but it would have given the people, market investors, confidence in their forward guidance credibility. >> isn't this what esther george, the president of the kansas city fed, said? >> yes. >> the market was totally ready for a $10 billion, $15 billion taper. even lloyd blankfein said the markets would be happy if we got a $10 billion, $15 billion tapering. if we got more, the market would be sad. that's what he said. the market is left wondering why we didn't do it. maybe the economic fundamentals don't support it. >> peter, tell us how to make some money. >> you have to look at today's action. and probably 50 points of the dow's move on the downside was the unwinding -- it was
expiration, quadruple wedge. a lot of the movement towards the end of the day was because of that. i'm not looking at 185-point move in the dow. more like 135, 140-point move in the dow. that's what we had on wednesday after bernanke's comments. to me, to make money in this market, i think there are going to be pullback. i think we're going to find levels to pull back to. it's going to solidify at that level and it's going to go back up. >> new highs? >> i think we're going to see new highs, absolutely. i think what we'll see in the third quarter is a very soft market. the earnings are going to be very soft in the third quarter. >> dan, do you agree with that? some really smart people think the mark is fairly valued and really had no place to go for a while but sideways. >> we've been in the 1,700s.
i think the issue that buffett gets to is with the multiple expansion that you've seen in the market over the last nine to 15 months or so, where revenues are growing, are margins are, equity strategy, what we do is on a topline basis, very simple. at the end of the day, given what's happened over the last, let's say, 12 months or so, it gets very hard to justify the types of returns going forward that we've seen in the past. >> can i just throw this out. i don't necessary like this. but if you have an easy money fed, let's say lindsey is right. no fed funds rate hikes, no slower bond purchases, none of that stuff.
and you get 3% to 5% earnings growth. not falling, just rising very modestly. isn't that good for stocks? easy money and rising -- >> at the end of the day, views and opinions are all well and good. but that's exactly what's happened. everyone says, the economy is so terrible. it's been terrible for three, four years. earnings growth, if you go back and look on cnbc.com at stories from a year ago, two years ago, three years ago, you were looking at slow earnings growth -- >> but is it that the easy money has already been made? that was buffett's point, i think. if you bought at the really depressed levels of the financial crisis, that was the time to buy. now the decision becomes a lot more difficult. >> sure. lower prices are always more attractive than higher prices. the question is not what's happened. >> it's funny, nobody wants a longer-term view. i want a longer-term view. you know what my view is longer term? stay with them.
american economy is going to triumph. the politics may not work out in the short run but they will in the long run. peter, dan, dominic, thank you. blackberry sends a bombshell message to wall street. massive layoffs. we're back with that story. and it was a top gun moment in the skies over the middle east. we'll tell you about one air force pilot's confrontation with the iranians, next up on "kudlow." ♪
you know it happens. every time apple releases a new phone, people line up around the block to get it. cnbc's dominic chu joins us now with that story and other news headlines. again, good evening. >> good evening, larry. as usual, people camped out overnight at apple stores. two new versions of the iphone went on sale. the 5s and the 5c. we're hearing reports that strong demand is there for the 5s, the more expensive model, especially the one that comes in the new color, which is gold. analysts are expecting apple to sell about 6 million of these iphones this weekend. ceo tim cook was so excited for the launch he finally joined twitter, larry. cook tweeted, quote, visited retail stores in palo alto today, seeing so many happy customers reminds us of why we do what we do. he launched his account at around 3:00 p.m. eastern time and since then has gained around, get this, 91,000 twitter
followers. moving on now to blackberry. the stock was down big late in the day after the company says it would cut 4,500 jobs, about 40% of its overall workforce. blackberry also preannounced second-quarter results and predicted a loss of close to $1 billion. it said sales would come in at $1.6 billion. that's only about half of what analysts were expecting. and i want to end with this really, really cool story. earlier this week, we learned of this close encounter in the middle east. a u.s. air force pilot in an f-22 fighter just like the one you see here, pulled off a move right out of "top gun." an iranian jet was close to intercepting a u.s. drone when the fighter pilot got under the iranian aircraft without being detected. pulled up on its left wing and called in and said, you really ought to go home. and it worked. he scared off that iranian plane. >> i have always believed if it came down to it, we would take out the iranian air force in about 20, 25 minutes.
>> let's hope it never comes down to that. but i think the superior technology and, yes, our air force would do pretty well. >> i love your reference to "top gun". >> i love it. >> in fact, it's playing on cable right now. dominic chu, best of the best. back to the big story of the evening, the budget battle got a lot sharper today as the house passed a bill to keep funding the government but also defunds obama care. the free market friday panel will tackle this battle next. but first, what does jay leno have to say about obama care these days? >> the opposition to obama care at all-time high. it's gotten so bad, the president is now calling it biden care. e paper and what? another article that says investors could lose tens of thousands of dollars in hidden fees on their 401(k)s?! seriously? seriously. you don't believe it? search it. "401(k) hidden fees." then go to e-trade and roll over your old 401(k)s to a new e-trade retirement account. we have every type of retirement account. none of them charge annual fees
he would, as president, be willing to have bilateral negotiations with the iranians. he'd be willing to have direct conversations and negotiations with the iranians, provided that the iranians are serious about ridding themselves of their nuclear weapons program. >> that was press secretary jay carney yesterday. let me get this straight. president obama is willing to negotiate with the iranians and with syria's president assad and with vladimir putin.
but when it comes to funding the american government, he's not willing to negotiate with congress. take a listen. >> they're not talking now about spending cuts. they're not talking about entitlement reform. they're not talking about any of that. now they're talking about something that has nothing to do with the budget, right? they're actually willing to plunge america into default if we can't defund the affordable care act. what i've said is i will not negotiate over the full faith and credit of the united states. >> all right. here now is ari melbourne. dan howard joins us, first time, from heritage action for america. driving force behind this defund effort. and our great friend, mark simone, from wor talk radio. dan, welcome to the show. i'm so skeptical this is going to work. you have to tell me how this is going to work. >> i think the first thing to
mention is we're talking about obama care. how long has it been since we've had a real conversation over obama care? congress said, we didn't forget about obama care. time for you to go back to washington and tackle it. the house did that. now the onus is opt senate. you have democrats in red states who want to get reelected. obama's not popular in their states. obama care is not popular there. we have some time to say, is never too late to get it right? you guys can do this. >> reid is going to squash it. he has all the cards. i'm not even sure you're going to get the ted cruz filibuster. reid can stop that by tabling the motion and sending it right back. but even if cruz has his filibuster, it's still going to go down. obama is basically blaming the republicans for shutdown right away, before anything happened. he's got the upper hand. what do you make of that politically? >> i don't think the president has the upper hand. he hasn't for a long time. ted cruz and conservatives around the country went around
the country and changed what washington was doing. they changed the narrative in the press as much as the press didn't want to admit it. there's a chance that conservatives can fundamentally change how things are working. >> larry, there's two problems here. you had two chances to answer the question and you don't have an answer for how you actually get to your goal and get to your objective. you're talking about narratives. you can write poetry, you can write a story, a novel about big, bag obama care. this is here to stay. it was a victory. it was validated in the reelection of the president and the supreme court said it's legal. from larry kudlow to karl rove, you have this break in conservative thought. and you guys, unfortunately, i don't know you well, but your position here is not on the side of reality and pragmatism, it's on the side of ted cruz's navella.
>> i like your view as a narrative. but the republicans had a better chance of eliminating the individual mandate, which is hated, and that's the backbone of obama care, or they could have at least delayed it for a year. that was a political winner. i think this defunding, right around september 30th when the government runs out of money, i think it's a mistake. >> this has never worked for anybody. the democrats tried this with the iraq war. even a young senator obama, kerry tried to end the war by defunding. that strategy never works. you can't fight on principle and facts. you have to have a strong narrative. when he says, they're trying to take health care away from american, how do you beat that? i would beat it by pointing out the 1,200 waivers that obama gave out. he's giving it to his friends, his buddies, big donors. republicans should show up at a press conference and say, take away all the waivers, put
everybody on obama care, including congress, and we'll sign it. >> congress and staff don't have to abide by obama care. in effect they're going back to delaying the individual mandate. that's delaying the whole thing and starting from scratch, when you're out from under this fiscal pressure -- see, your point, i have to go with it. i think the president -- he calls up boehner -- tell me this. what does this mean? he calls up boehner tonight just before the show started to tell boehner, according to boehner's press guy, that he won't talk to him about the debt ceiling. we haven't even gone to the debt ceiling yet. won't talk to him about it. what does that tell you about obama's political position? >> what it tells me is that washington lacks imagination. if i told you in 2011 that we would have funding levels at the levels the republican study committee wanted and president obama would have signed those into law, you all would have laughed at me. but that's what we have because we stood up and fought for it. >> the sequester thing was
great. >> you wouldn't have thought that was possible in the beginning of 2011. we need to feig to change what's actually possible in washington. >> we'll leave it there. good argument. much more to cover on this shutdown threat. but first here's a little shutdown humor from "the tonight show." >> if the republicans and democrats can't get together, there's a strong possibility of a federal government shutdown. you know what the legal deflection of that is? a government shutdown is when congress continues not to work but they do it from home. see, they don't work -- why are we calling it a government shutdown? we are $17 trillion in debt. why don't we call it a going out of business sale? doesn't that make more sense? i was made to work.
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making big political mistakes. and this idea that he'll talk to iran and syria and russia but he won't talk to the house republicans, i think, is going to hurt him a lot. as usual, he's not helping his political situation. >> well, it's only a little bit of rhetoric to say there is more to talk about with iran or russia than some of these tea party folks. the reason is they want to take this discussion over what we do with our budget and our funding and turn it into a discussion of ten other things that have nothing to do with it. if you put the shoe on the other foot with a republican president and the democrats said, we're not going to do anything until you say that you are for abortions across the country and that's the only way that we will pull out and work with you on -- >> hang on. >> paying the debts that we've already accrued, everyone would say, that's ridiculous. what would you debate -- >> obama care is going -- if it goes through as planned, it is going to rack up a couple of trillion dollars more of debt.
i would say that's germane to the debt ceiling bill. and i think the republicans' case is a pretty good case. i just don't like this defunding on the eve of the shutdown. but if the president is going to be so arrogant as, a, i will not negotiate and, b, hello, mr. speaker, i'm the president, i will not negotiate, that is unbelievable arrogance and is going to backfire on him. >> i don't think it's arrogance. i don't think there's a point in fake negotiations. it is true they have nothing to talk about so long as the threat is defaulting on our debt for things we already paid for. even honest republicans will tell you, we ran up the tab too much in the bush years, medicare, iraq. that's what the costs are. this is not obama care. it's not germane. >> of course it is. "the washington post" gave obama four pinocchio noses because down through the years they've had plenty of those.
obama doesn't want to play, he kept saying, i want a clean debt ceiling and the republicans said no. republicans won. >> yeah. >> they got their sequester later on. so they won twice. now, that could happen now. that's really dan's best case. >> and even 2005 a young senator obama tried to defund the iraq war while troops were in combat. the sequester, you're never going to -- >> is that right? are you offering that as something that was good? >> no. i'm saying the democrats would never pull this stuff. they did -- >> i didn't. >> but the democrats invented this game. take the sequester. it was his plan originally. so he's the villain. now he's made himself into the victim of the sequester. he's brilliant at the political theatrics. at creating the story line that benefits him. >> the debt ceiling is, in my opinion, a bigger financial event, it's a global
international event if the debt ceiling passes without any increase, it's going to be very bad. the republicans don't yet have a real plan on the debt ceiling, talking about entitlement reform, talking about the keystone pipeline, talking about some schedule for tax reform. >> it's a grab bag. >> right. i think you have a problem there. i think the debt ceiling cannot be broached, cannot be broached. i don't see what mr. boehner is going to do. i don't hear a thing. >> they spent the whole summer of 2011 messaging that if we're going to increase the debt ceiling, we're going to cut spending. they had this opportunity during the spring -- >> mr. boehner said today he will not cut spending anymore on the debt ceiling, today. they're looking at possibly entitlements. i think that's a reach. tax reform, the keystone pipeline, he said, we will not cut more spending. >> they had an opportunity to get the message right back in march when they said, we're going to get on a path to balance. that's popular in this country.
and he spent the last six months about when it comes down to the debt ceiling, we're going to get on a path to balance. i don't know how it plays out right now. >> i think a two or three-day shutdown has no economic or financial impact. they can fix all that. i think the debt ceiling is much more serious. and i think that's the one you have to watch out for. from what i gather, they don't yet have a program. that's where your position comes into play and where the president comes into play. but on the other hand, 2011, republicans outjockeyed them. obama care is job one killer. but why stop there? today, the epa announced new rules that are going to crush jobs and send your power bills soaring. cnbc's dominic chu is going to return next with that story and some more from our free market friday panel. please stay with us.
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the obama administration setting a new red line tonight. this time against coal and carbon emissions. the epa with no approval from congress acting on its own is proposing drastic new restrictions which would for the first time limit carbon emissions from all future power plants. cnbc's dominic chu back with us with that story. >> this is the headline number, 40%. the new rules says that all coal-fired plants built from this point on will have to emit less carbon than they do right
now. to do so, these plants would have to capture and store about 40% of their emissions. this is a very complicated, expensive and unproven process. therefore, no one is expected to build a new coal-fired plant anytime soon. the administration is saying it's investigating billions in coal technology and the industry should step up and do it, too, instead of fighting every new rule. that being said, the industry is already coming up with strategies to fight this new epa rule in court. as you said, larry, one reason it doesn't sit well with some people is because knowing these new guidelines would never pass congress, the epa just implemented them on its own. so a lot of issues to sort through here. >> you're right. dominic chu, thank you very much. ari, this is one of his big mistakes, the epa running wild. you're essentially going to terminate a huge american industry in a lot of states across the country for an
unproven technology that is massively expensive. >> carbon capture and storage is the technology and that's what would allow you to put some of this and offload it, keep it out of the air and basically under control of industry. that's the concept. >> we don't know if it works. >> it is true -- it's definitely true this stuff hasn't been out and totally proven. you have administrators who are nonpartisan. you have republicans in the agency, whether republicans outside of it like it or not. they think it can work. it's about 700 pounds of carbon that's the difference in the rate that they're trying to cut. and to be clear, it's only for new plants. i don't think you're terminating an entire industry. if you have an existing job, you're not in a future power plant. this is forward-looking. >> like if you have an existing doctor, you can keep him. >> the next step is existing plants. that's coming. that's definitely coming. >> your exact words, they think it will work. >> it bypasses congress and this
is sort of part of this white house executive branch arrogance. >> it's not a little thing. the coal industry, that's 37% of our energy here in the united states. you're going to increase the cost of all of that. as you said, they think it will work. why not just go test this technology on a plant or two and see the side effects of it? the only tests were government-funded tests. we haven't tested this independently. >> you make a rule, industry responds to the rule, technology responds to the rule. that's how public a/private partnerships work. a lot of people around the country feel having environmental rules protects our water and air. it's not only a profit thing. >> you put this contraption on top of the coal plants and funnel the carbon into the ground, then they're going to say, you put carbon in the ground, that affects our drinking water. there is no end to this. >> we don't even know -- this whole business about carbon emissions polluting the air or whether it's an act of nature, we don't know that.
that itself has never been proven. the epa is way far ahead of where it ought to be on this. the question is, what's the senate and house going to do about it? i think democrats will lead the way. you wait. joe manchin of west virginia is going to lead the way. ari, dan and mark, thank you very much. that's it for this evening's show. thanks for watching. somebody's got to corral the epa. i know what you're thinking... transit fares! as in the 37 billion transit fares we help collect each year. no? oh, right. you're thinking of the 1.6 million daily customer care interactions xerox handles. or the 900 million health insurance claims we process. so, it's no surprise to you that companies depend on today's xerox for services that simplify how work gets done. which is...pretty much what we've always stood for. with xerox, you're ready for real business.
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